Making the "F" grade
Having too much
Public or Private?
Heinz 57
Rubber Bands
100
Negative externalities, positive externalities and public goods are all examples of this market condition.
What are market failures?
100
The difference between the minimum price producers are willing to accept for a product and the higher equilibrium price.
What is produce surplus?
100
The two main characteristics of a public good.
What are nonrivalry and nonexcludability?
100
One person's consumption of a good does not preclude another's consumption of the same good.
What is nonrival in consumption?
100
You are the sales manager for a software company and have been informed that the price elasticity of demand for your most popular software is less than 1. To increase total revenues, you should ___________ price.
What is increase?
200
This makes it very difficult for private firms to produce a public good profitably.
What is the free-rider problem?
200
At the optimal quantity of a public good this condition exists.
What is marginal benefit equals marginal cost?
200
Unlike a private good, a public good provides benefits for all, even those who_____________.
What is do not pay?
200
A 5 percent cut in the price of a product causes the quantity demanded to rise by 10 percent. This product is said to be ____________.
What is elastic?
200
The demand for Cheerios cereal is more price-elastic than the demand for cereals as a whole. This is best explained by the fact that there are more _____________ for Cheerios than for cereals as a whole.
What are substitutes?
300
People enjoy outdoor holiday lighting displays, and would be willing to pay to see these displays, but can't be made to pay. Because those who put up lights are unable to charge others to view them, they don't put up as many lights as people would like. This is an example of a:
What is demand-side market failure?
300
The output where the combined amounts of consumer and producer surplus are largest.
What is the maximum willingness to pay for the last unit of output equals the minimum acceptable price of that unit of output?
300
The provider of public goods.
What is the government?
300
The private demand curve will _____________ the true demand curve if there are external benefits associated with the consumption of a good or service.
What is underestimate?
300
To economists this is the main differences between "the short run" and "the long run."
What is the variability of resources?
400
The trains of the Transcontinental Railway Company, when shipping goods, sometimes emit sparks that start fires along the tracks and damage the property of others. This occurs if Transcontinental does not pay for the damage it causes.
What is supply-side market failure?
400
Jennifer buys a piece of costume jewelry for $33 for which she was willing to pay $42. The minimum acceptable price to the seller, Nathan, was $30. Jennifer experiences:
What is a consumer surplus of $9 and a producer surplus of $3?
400
Some activities create external benefits as well as private benefits. Economic theory suggests that the activity ought to be ____________.
What is subsidized?
400
Assume total revenue falls as the price of a good is raised. This is the best way to describe the consumer's responsiveness to this price change.
What is elastic?
400
Cross elasticity of demand is negative for this type of goods.
What is complementary?
500
It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river. As a result, operators of hydroelectric power-generating plants downstream along the river find that they must clean up the river's water before it flows through their equipment. _____________ is the most appropirate policy to deal with this problem. (Note: Not an "F" response.)
What is Levy a tax on the producers of paper products and use the tax revenues to clean up the river?
500
This occur when the quantity of an output produced is less than or greater than the competitive equilibrium quantity.
What is deadweight losses?
500
The market system does not produce public goods because this action cannot be stopped.
What is consumers from benefiting from them, but are unwilling to pay for them?
500
Assume 100 shirts are sold when unit price is $10, while 75 shirts are sold when the unit price is $15. Consumers responsiveness to this price change is said to be _________.
What is inelastic?
500
A negative income elasticity of demand coefficient indicates that the product is __________.
What is inferior?
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